An American exports 10 LinaBell plushies to a collector in Shanghai for a total cost of 23,000 RMB. If you opt to buy Chinese bonds worth 23,000 with the money, then the U.S. current account deficit: a. falls by 23,000 RMB (equivalent), but the U.S. financial account surplus also falls by 23,000 RMB (equivalent). b. falls by 23,000 RMB (equivalent), but the U.S. financial account surplus rises by 23,000 RMB (equivalent). c. remain unchanged. d. rises by 23,000 RMB (equivalent), but the U.S. financial account surplus also rises by 23,000 RMB (equivalent).
An American exports 10 LinaBell plushies to a collector in Shanghai for a total cost of 23,000 RMB. If you opt to buy Chinese bonds worth 23,000 with the money, then the U.S. current account deficit: a. falls by 23,000 RMB (equivalent), but the U.S. financial account surplus also falls by 23,000 RMB (equivalent). b. falls by 23,000 RMB (equivalent), but the U.S. financial account surplus rises by 23,000 RMB (equivalent). c. remain unchanged. d. rises by 23,000 RMB (equivalent), but the U.S. financial account surplus also rises by 23,000 RMB (equivalent).
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter11: Foreign Exchange, Trade, And Bubbles
Section: Chapter Questions
Problem 9MC
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Transcribed Image Text:An American exports 10 LinaBell plushies to a collector in Shanghai for a total cost of 23,000 RMB. If
you opt to buy Chinese bonds worth 23,000 with the money, then the U.S. current account deficit:
a. falls by 23,000 RMB (equivalent), but the U.S. financial account surplus also falls by 23,000 RMB
(equivalent).
b. falls by 23,000 RMB (equivalent), but the U.S. financial account surplus rises by 23,000 RMB
(equivalent).
c. remain unchanged.
d. rises by 23,000 RMB (equivalent), but the U.S. financial account surplus also rises by 23,000 RMB
(equivalent).
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